One hundred and six months. The current expansion, having emerged in the aftermath of the collapse of the mortgage finance Bubble, is now the second-longest on record (lagging only the 120-month 1990's Bubble period expansion). The unemployment rate dropped to 3.9% last month, the lowest level since the 3.8% print in April 2000. Corporate earnings are at unprecedented levels and stock prices only somewhat below records. Home prices in most markets are at all-time highs. U.S. GDP is forecast to expand 2.8% this year, just below 2015's (2.9%) 12-year high. We should be leery of prolonged expansions. The longer a boom, the greater the opportunity for deep-rooted structural impairment. Back in 2013, I proposed the concept of "Government Finance Quasi-Capitalism." This was updating previously updated Hyman Minsky analysis. Minsky's "Stages of Development of Capitalist Finance" seems especially relevant these days: Minsky: "In both Keynes and Schumpeter the in-place financial structure is a central determinant of the behaviour of a capitalist economy. But among the players in financial markets are entrepreneurial profit-seekers who innovate. As a result these markets evolve in response to profit opportunities which emerge as the productive apparatus changes. The evolutionary properties of market economies are evident in the changing structure of financial institutions as well as in the productive structure… To understand the short-term dynamics of business cycles and the longer-term evolution of economies it is necessary to understand the financing relations that rule, and how the profit-seeking activities of businessmen, bankers and portfolio managers lead to the evolution of financial structures."Minsky saw the evolution of capitalist finance as having developed in four stages: Commercial Capitalism, Finance Capitalism, Managerial Capitalism and Money Manager Capitalism. "These stages are related to what is financed and who does the proximate financing - the structure of relations among businesses, households, the government and finance." (CBB 12/28/2001 "Financial Arbitrage Capitalism")Late in his life, Minsky was increasingly concerned with the transmutation of Money Manager Capitalism: "The emergence of return and capital-gains-oriented block of managed money resulted in financial markets once again being a major influence in determining the performance of the economy… Unlike the earlier epoch of finance capitalism, the emphasis was not upon the capital development of the economy but rather upon the quick turn of the speculator, upon trading profits… A peculiar regime emerged in which the main business in the financial markets became far removed from the financing of the capital development of the country. Furthermore, the main purpose of those who controlled corporations was no longer making profits from production and trade but rather to assure that the liabilities of the corporations were fully priced in the financial market..."Proffering "Financial Arbitrage Capitalism," I first updated Minsky's analysis back in 2001. Noting Minsky's "financial structure is a central determinant of the behavior of a capitalist economy," I had become convinced that a fundamentally new power center had evolved within the financial system. With the activist Greenspan Federal Reserve pegging short-rates and guaranteeing market liquidity, a new regime of enterprising financial speculation was unleashed. At the same time, Washington's GSE's had become powerful market operators with the capacity to issue seemingly endless quantities of "AAA" securities, while providing central bank-like ("buyer of first and last resort") market liquidity backstops. "Wall Street Alchemy" was transforming risky loans into money-like marketable securities ("Moneyness of Credit"). These securities provided the fuel for aggressive leveraging by the hedge fund community and Wall Street proprietary trading desks. This sophisticated financial structure profoundly bolstered Credit Availability and growth, while also fueling pernicious asset inflation, stoking over-consumption and, over years, fundamentally altering the nature of investment, resource allocation and Economic Structure.Financial Arbitrage Capitalism proved a powerful if relatively transitory Stage of Capitalistic Development. The mortgage finance Bubble collapse ushered in the latest phase of government and central bank control over Financial Structure and Capitalistic Development. It's now been almost a decade of unprecedented monetary and fiscal stimulus - ten years of central bank command over the financial markets. Over time, markets became progressively less attentive to risk, including business cycle cyclicality, financial excess and instability. Bear markets and recessions had been prohibited. Basically, no amount of excess was concerning. And, importantly, the magical concoction of extremely low rates and extremely big deficit spending would ensure a corporate profits bonanza as far as the eye can see. May 2 - Bloomberg (Shannon D. Harrington and Erik Schatzker): "Greg Lippmann, who helped design the trade against subprime mortgages that became known as the Big Short, says the next financial tremors will come from corporate debt. The former Deutsche Bank AG trader who now oversees about $3 billion at his LibreMax Capital LLC said… that corporate debt and equities will face the biggest pain when the next downturn comes. Investments linked to consumer debt, unlike the last crisis, will be relatively safe because companies have been the ones gorging the most on the ultra cheap interest rates during the past decade. 'If the first quarter's volatility is a harbinger of something bigger, I think that you're going to see a lot more trouble in the corporate market and the equity market than the structured products market,' Lippmann said on the sidelines of the Milken Institute Global Conference… 'The consumer is in much better shape than corporates. Consumers are less levered than they were pre-crisis. Corporates are more levered than they were pre-crisis, and I think structured products are not going to be the epicenter.'"I also doubt that structured products will be at the epicenter of the next crisis. Subprime, mortgage Credit, and Wall Street Alchemy were the nexus for Financial Arbitrage Capitalism period excess. Government Finance Quasi Capitalism fundamentally altered the prevailing Financial Structure financing what is now one of the U.S. history's longest expansions.Financial Arbitrage Capitalism altered perceptions, market behavior and Financial Structure in one (critical) segment of the marketplace. In particular, it incentivized leveraged speculation by the hedge fund community and Wall Street trading desks. This had profound ramifications for consumer Credit availability and borrowing. The overall surge in system Credit growth imparted structural effects throughout the financial markets and economy. Latent fragilities emerged with the collapse of mortgage Credit growth. Notably, though some obvious exceptions, corporate balance sheets were not in terrible shape when crisis hit. After all, years of historic mortgage Credit growth had funneled cash to corporate America, as well as to the U.S. Treasury. Washington was well-positioned in 2008 for a robust crisis response. Fannie and Freddie were nationalized, with zero impact on the perceived creditworthiness of Treasury securities. The Fed immediately slashed rates to zero. This incited a refinancing boom, significantly reducing household debt service costs. Large quantities of previously higher risk mortgages were refinanced into top-rated GSE securities, many surely making their way onto the Fed's ballooning balance sheet. Especially with the failure of Lehman and AIG, structured finance was generally in disarray. But the limited number of operators in this space made the situation manageable for the Federal Reserve and Treasury. There were only limited issues with money market funds, and for the most part the U.S. mutual fund complex was outside the worst of the fray.I would argue that the current Government Finance Quasi Capitalism stage has created much deeper and problematic financial and economic structural maladjustment. As has been said, "Capitalism without failure is like heaven without hell." A decade of aggressive policy activism worked its magic. The old notion of one-decision stocks morphed into One-Decision Markets: Just buy and hold - your favorite equities or Credit index. Analysis Not Required. Central bankers will ensure the trajectory of stock prices remains up. The Fed's commitment to liquid and continuous markets has never been as rock solid. There will be no panic selling of stocks, and no destabilizing spike in market yields. And with rates at or near zero, there has never been such powerful incentives to buy risk assets (stocks, corporate Credit, EM, etc.). The perception of liquidity and safety ("Moneyness of Risk Assets") ensured a wall of liquidity would inundate funds holding equities, corporate bonds and EM securities. Amazingly, ETF assets grew almost 10-fold since 2008, in one of the history's most spectacular speculative financial flow episodes. May 3 - Financial Times (Joe Rennison and Ben McLannahan): "An important shift in how companies finance themselves has reached a milestone. The leveraged loan market has officially become a $1tn asset class and is catching up fast with US high yield or junk bonds. Since 2010, the leveraged loan market has doubled in size from $500bn while US high yield has expanded $250bn to $1.1tn, according to Bank of America Merrill Lynch. The growth in loans reflects a post-financial crisis shift away from being a 'private bank-loan model to a thriving syndicated market with hundreds of participants' that has coincided with retail money flowing into the market, says the bank. Money has continued to pour into loan funds, where interest rates are floating and adjust higher as the Federal Reserve tightens policy. That kind of demand has helped fund and drive a record era for merger and acquisitions. 'A higher proportion of capital raised today goes towards LBOs [leveraged buyouts] and acquisitions than was the case in 2010,' says BofA, noting how half of money raised since 2016 has reflected M&A, up from a level of 30 to 40% at the beginning of the cycle."Indicative of the altered Financial Structure, Government Finance Quasi Capitalism ensured a more than doubling of the leveraged loan market (since 2010) to $1.1 TN. "Retail money flowing into the market." Indeed, the proliferation of ETF products has ensured the flow of retail money in abundance to all corners of the risk markets - corporate Credit and equities in particular. Indirectly perhaps, but retail flows are these days helping fuel record M&A. And let's not forget the "short vol" funds and other complex derivatives strategies. And especially during period of dollar weakness, performance chasing flows have deluged EM. It's been heavenly, or at least financial nirvana. And the massive "retail" flows into the global risk assets remain oblivious to now rapidly mounting risks.Going back centuries, the "money market" has traditionally been at the financial crisis epicenter. From traditional bank runs to the 2008 run on Lehman's repurchase agreements, it's the panic liquidation of previously perceived safe and liquid instruments that can instantly spark illiquidity and crisis. Money has special attributes to be coveted and safeguarded. To purposely bestow the perception of moneyness upon risk assets - across asset classes on a global basis - is one of great transgressions in the history of central bank monetary management.I would add that the proliferation of tantalizing new technologies makes this cycle all the more perilous. Massive prolonged speculative financial flows throughout a period of alluring technological innovation ensures malinvestment and deep structural impairment. Historical revisionism paints the 1920's as the "golden age of Capitalism," brought to a catastrophic conclusion by the Fed's negligent post-crash failure to inflate the money supply. In reality, it was a historic period of misperceptions - misperceptions as to the capabilities of Federal Reserve, Wall Street, financial innovation and technological advancement. It all came home to roost.The "Roaring Twenties" episode was a confluence of colossal financial flows and historic technological development that ensured epic structural maladjustment and attendant latent fragilities. Unappreciated, especially late in the cycle, was the harsh reality that the finance fueling the boom was increasingly unsound, unstable and unsustainable. When speculative flows inevitably reversed, everything came tumbling down - everywhere.Few companies have benefitted from Government Finance Quasi Capitalism as much as Amazon.com. For years, markets afforded Amazon virtually free money. The company would readily borrow billions, invest aggressively and not have to worry a lick about profitability. With a current market cap of $767 billion, things have worked out fantastically for the company, their employees and shareholders. It's worked out pretty well for consumers as well, but at the expense of traditional retailers across the country.My issue is not with Amazon.com, but with today's thousands of wannabes. Just raise "capital" and spend as aggressively as possible. Profitability and cash-flows are a concern for some day out in the future. What matters is a clever idea, growth, market share and dominance the quicker the better. It's a financial, market and business backdrop that has fostered an Arm's Race Mentality - online retail and services, the cloud, AI and quantum computing, blockchain, 5G, cybersecurity, Internet of Things, electric automobiles, battery technologies and alternative energy, autonomous vehicles, biotech and pharmaceuticals, automation and robotics, nanotechnology, and on and on. It's somewhat reminiscent of 1999, but on such a grander scale that the two periods are hardly comparable. The late-twenties is more pertinent: the proliferation of exciting technologies and innovation; lavishly over-liquefied securities markets; faith in policymakers and a general disregard for risk. In 1929, there was essentially no recognition of downside risk. A long boom had convinced about everyone that financial and economic underpinnings were sound. Similar to today, little attention was paid to the soundness of the finance underpinning the boom. During the mortgage finance Bubble period, there was some recognition of how the system was "privatizing profits and socializing losses." And that's exactly how it played out during the crisis, with expensive bailouts, massive deficit spending and crazy central bank monetization. I would expect the next crisis to have disparate and more problematic dynamics.At this point, an abrupt reversal of "retail" flows from the risk markets will pose a potentially greater systemic challenge than the previous crisis of confidence in structured finance. Not only have retail flows come to play a major financing role throughout corporate America, I would expect the sophisticated leveraged speculating community to move quickly to get ahead of ("front-run") outflows as they begin to materialize. Moreover, there are these gargantuan derivatives markets that are expected to function as an insurance marketplace. Rather quickly, liquidity will become a serious systemic issue across the securities and derivatives markets. Financial conditions might tighten dramatically almost overnight, abruptly interrupting plans for tens of thousands of negative cash-flow enterprises across the country - big and small. That's when Financial and Economic Structure will matter mightily.A decade of Government Finance Quasi Capitalism has deeply engrained the view that enlightened central bankers and spendthrift governments have together tamed the business cycle. Bear markets and recessions were conveniently removed from the calculus. It's accepted as gospel that myriad risks have been fundamentally downgraded. In reality, the socialism of finance has annulled the capacity of markets to self-adjust and correct. Pressure just keeps building. The upshot has been highly unstable Bubble flows - into the securities markets, intermediated through perceived safe and liquid investment vehicles into business enterprises on increasingly fragile footing - on an unprecedented scale. On a global basis (again with parallels to the 1920's), Bubble dynamics have ensured that financial and real resources have for years been poorly allocated, with maladjustment and imbalances now greatly in excess of those prior to the 2008 crisis. I have posited that the February blowup of "short vol" marked a critical juncture for the global Bubble - the initial round of market instability that would set in motion de-risking and de-leveraging dynamics and waning global liquidity. I'll suggest that global markets have commenced round two. The dollar index jumped another 1.1% this week, as stress intensifies in the emerging markets. The Argentine peso sank 6.1% this week, as Argentina's central bank hiked rates 675 bps (to 40%) to support its collapsing currency. The Turkish lira dropped 4.5% to a record low, as 10-year yields surged to almost 14%. The Mexican peso dropped 3.4%, the Polish zloty 2.4% and the Brazilian real 2.0%. Stocks were down 4.7% in Argentina, 4.7% in Turkey, 3.8% in Brazil and 2.7% in Mexico. EM stress somewhat supported Treasuries and safe haven sovereign debt more generally this week. Weak EM likely spurred some unwind of global "carry trade" leverage, with negative ramifications for EM currencies, equities and bonds - and global liquidity more generally. There also appeared to be an unwind of long EM/short "developed" trading dynamic, which might help to explain this week's rally in European equities (that spilled over into U.S. equities Friday). If nothing else, EM is illuminating how abruptly speculative flows tend to reverse course - and the newfound proclivity for Crowded Trades to morph into Liquidity Traps. The Old Roach Motel.

Nearly a quarter of the world’s population remains unbanked. But mobile phones are helping to change that, writes Simon Long

AS THE EBOLA virus was devastating parts of west Africa in 2014, Sierra Leone’s difficulties were compounded by its emergency-response workers going on strike. They were risking their lives, but were often paid erratically and not in full. Sometimes they travelled long distances to collect the money, in cash, to find that it had been disbursed to an impostor, or that the official paying it out would take a cut. So the government switched to making the payments digitally, to the workers’ mobile-phone accounts. That way they were paid in a week in full, rather than after a month with deductions. Thanks to lower costs and reduced fraud, the new system was millions of dollars cheaper. The strikes ended; lives were saved.According to a report by the Better than Cash Alliance, a partnership based at the UN of governments, companies and organisations promoting digital payment, Sierra Leone was well placed to make this change in two respects: about 95% of the country was covered by a mobile-phone signal; and 90% of the emergency workers had mobile phones. Even so, the obstacles were formidable. Only 15% of the workers had mobile-money accounts. Opening one could be hampered by a lack of documentation, made worse by the country’s severe shortage of surnames (most people share just ten of them). Biometric identification, such as fingerprints, raised fears of infection from the Ebola virus (a problem that was solved by facial-recognition technology). But they got there in the end.

The episode offers a graphic example of how technology can deal with “financial exclusion” by greatly reducing the number of those without access to financial services. Almost inadvertently, the spread of mobile telephony and mobile-internet services has brought hundreds of millions of people into the formal financial system. Take bKash, of Bangladesh, one of the world’s biggest mobile-money services. Started in 2011, it now reaches 30m registered customers. Kamal Quadir, a founder, says people used to keep their money under the mattress; now they can store it on their phones. The service “has become the collective mattress for all the common people of Bangladesh. Now the money is in digital form and they are in the banking system regulated by the central bank.”Since its inception in the Philippines in 2000 and its take-off in Sub-Saharan Africa more than a decade ago, “mobile money”—the transfer of cash by phone—has become a global phenomenon, welcomed and encouraged by governments and international organisations. In 2010 the G20 group of countries came up with a set of “Principles for Innovative Financial Inclusion”. In 2012 the World Bank, with funding from the Bill and Melinda Gates Foundation, produced the first “Findex”, or financial-inclusion index, an ambitious attempt to measure the scale of the problem and track efforts to tackle it.This special report will look at some of the fruits of those efforts. It appears at a relatively optimistic time, when the ranks of the financially excluded are thinning fast and there are strong hopes that the process will accelerate further. One reason is the growth in mobile-phone and internet penetration, making finance accessible even to those living a long way from physical bank branches or ATMs. According to the Findex, 78% of the world’s unbanked adults receiving wages in cash have a mobile phone. Moreover, the “unbanked” are seen as an increasingly attractive commercial market. Firms as diverse as Ant Financial, an affiliate of Alibaba, China’s e-commerce behemoth, and PayPal, a Silicon Valley payments firm, make much of their role in expanding financial inclusion. Daniel Schulman, PayPal’s chief executive, says his company’s mission is “to democratise financial services”.The report will consider whether non-profit organisations and businesses are right to be so upbeat about the prospects for more financial inclusion. On the commercial side, tensions have arisen between the different sorts of businesses engaged in this market: commercial banks jealous of their traditional quasi-monopoly on formal finance and yet wary of further risky adventures in “subprime” markets; mobile-network operators that now provide the infrastructure for payment, the most basic of financially inclusive services; the “fintechs”, aggressive financial-technology startups fizzing with bright ideas, idealism and sometimes greed; and, increasingly, the “platforms”, big internet firms that have a lock on how people spend their time online. The report will ask whether the winners from all this competition will be consumers, and “especially the relatively excluded”, as Olivia White of McKinsey, a consultancy, believes.

Making poverty profitable

Although it will look at rich countries, it will focus mainly on the developing world, where the problem is most acute. One example of a country where financial exclusion is extreme but prospects for greatly reducing it seem bright is Pakistan. Only 24% of the adult population there have bank accounts, a further 7% use other formal financial services and 24% are served informally. But the country has a huge population (about 210m), much of it young; a high level of mobile-phone penetration (146m accounts) and mobile-signal coverage; a decent regulatory framework; and a vibrant ecosystem of non-profits and foreign and domestic businesses committed to the market. Kosta Peric of the Gates Foundation believes that Pakistan is on its way to becoming “the first fully connected and inclusive economy”.The latest “Findex”, its third iteration, based on 150,000 interviews and covering data for 2017, was published last month. The headline findings are striking: although the problem remains vast, progress has been spectacular. At 1.7bn worldwide, the number of the “unbanked” in 2017 was down from 2bn in 2014 and 2.5bn in 2011 (see map). The proportion of adults with a bank or mobile-money account was up to 69% last year, from 62% in 2014 and 51% in 2011. In the three years since the previous Findex, 515m people had acquired an account.

Notional access to an account is not the same as “inclusion”. The Findex report finds that a quarter of all accounts worldwide are inactive, with no deposits or withdrawals in the past 12 months. India’s numbers are especially misleading. Following the launch of a bold financial-inclusion plan in 2014, which promised that every Indian would have access to a basic bank account, some 240m accounts were opened over the next two years. But it soon became clear that up to a quarter of them were “zero-balance accounts”, a euphemism for “unused”. So banks made sure most had at least some money in them, perhaps by depositing tiny sums, often out of the bank staff’s own pockets. “Zero-balance” made way for “one-rupee” (1.5 cents) accounts, but financial inclusion improved only on paper.Even if the accounts are in use, some in the field argue that in itself this does little to enhance inclusion. It does not allow the holder to borrow, save or buy insurance. If financial exclusion is defined more broadly, it also covers many unbanked or underbanked people in the rich world, where the issue is attracting attention from policymakers.In both rich and poor countries, financial technology, or fintech, is already seen as the dominant force behind the big advances of recent years recorded in the Findex. Leaving aside the relentless advance of the mobile phone, the optimism is inspired by progress in two areas. One is the development of cheap biometric systems allowing even the illiterate with no papers to establish a unique digital identity that a financial institution can use. In India, for example, 99% of the adult population now have a 12-digit universal identity number, known as Aadhaar. Such systems are not foolproof. A surprising number of people lack a distinct fingerprint, and iris recognition needs high-quality cameras. Biometric-based algorithms always involve a trade-off between precision and ease of use. But when other means of identification are added, security can be far tighter than it ever was in a paper-based regime.Second, cloud computing allows ever greater numbers of financial transactions to be automated and unimaginable quantities of data to be analysed by artificial intelligence (AI). Ant Financial boasts a 3-1-0 model: three seconds to reach a credit decision; one second to transfer the money; no human intervention. Automation also reduces the cost of providing finance and makes it profitable to deal in smaller amounts of money. Instead of being a bad banking risk, the poor have become the business opportunity at the bottom of the pyramid. And new sorts of data, along with more sophisticated ways of using them, may compensate for the lack of a credit history and give the unbanked access to finance for the first time.

ALL presidents, Republican and Democrat, seek to remake their party in their own image. Donald Trump has been more successful than most. From the start, the voters he mesmerised in the campaign embraced him more fervently than congressional Republicans were ready to admit. After 15 months in power, as our briefing explains, he has taken ownership of their party. It is an extraordinary achievement from a man who had never lived in Washington, DC, who never held public office, who boasted of groping women and who, as recently as 2014, was a donor to the hated Democrats.The organising principle of Mr Trump’s Republican Party is loyalty. Not, as with the best presidents, loyalty to an ideal, a vision or a legislative programme, but to just one man—Donald J. Trump—and to the prejudice and rage which consume the voter base that, on occasion, even he struggles to control. In America that is unprecedented and it is dangerous.

Already, some of our Republican readers will be rolling their eyes. They will say that our criticism reveals more about us and our supposed elitism than it does about Mr Trump. But we are not talking here about the policies of Mr Trump’s administration, a few of which we support, many of which we do not and all of which should be debated on their merits. The bigger, more urgent concern is Mr Trump’s temperament and style of government. Submissive loyalty to one man and the rage he both feeds off and incites is a threat to the shining democracy that the world has often taken as its example.

Not what, but how

Mr Trump’s takeover has its roots in the take-no-prisoners tribalism that gripped American politics long before he became president. And in the past the Oval Office has occasionally belonged to narcissists some of whom lied, seduced, bullied or undermined presidential norms. But none has behaved quite as blatantly as Mr Trump.At the heart of his system of power is his contempt for the truth. In a memoir published this week (see Lexington) James Comey, whom Mr Trump fired as director of the FBI, laments “the lying about all things, large and small, in service to some code of loyalty that put the organisation above morality and above the truth”. Mr Trump does not—perhaps cannot—distinguish between facts and falsehoods. As a businessman and on the campaign he behaved as if the truth was whatever he could get away with. And, as president, Mr Trump surely believes that his power means he can get away with a great deal.When power dominates truth, criticism becomes betrayal. Critics cannot appeal to neutral facts and remain loyal, because facts are not neutral. As Hannah Arendt wrote of the 1920s and 1930s, any statement of fact becomes a question of motive. Thus, when H.R. McMaster, a former national security adviser, said (uncontroversially) that Russia had interfered in the election campaign, Mr Trump heard his words as unforgivably hostile. Soon after, he was sacked.The cult of loyalty to Mr Trump and his base affects government in three ways. First, policymaking suffers as, instead of a coherent programme, America undergoes government by impulse—anger, nativism, mercantilism—beyond the reach of empirical argument. Mr Trump’s first year has included accomplishments: the passage of a big tax cut, a regulatory rollback and the appointment of conservative judges. But most of his policymaking is marked by chaos rather than purpose. He was against the Trans-Pacific trade deal, then for it, then against it again; for gun control, then for arming teachers instead.Second, the conventions that buttress the constitution’s limits on the president have fallen victim to Mr Trump’s careless selfishness. David Frum, once a speechwriter for George W. Bush, lists some he has broken (and how long they have been observed): a refusal to disclose his tax return (since Gerald Ford), ignoring conflict-of-interest rules (Richard Nixon), running a business for profit (Lyndon Johnson), appointing relatives to senior posts in the administration (John F. Kennedy) and family enrichment by patronage (Ulysses S. Grant).And third, Mr Trump paints those who stand in his way not as opponents, but as wicked or corrupt or traitors. Mr Trump and his base divide Republicans into good people who support him and bad people who do not—one reason why a record 40 congressional Republicans, including the House Speaker, Paul Ryan, will not seek re-election. The media that are for him are zealous loyalists; those that are not are branded enemies of the people. He has cast judicial investigations by Robert Mueller into his commercial and political links with Russia as a “deep-state” conspiracy. Mr Trump is reportedly toying with firing Mr Mueller or his boss in the Department of Justice. Yet, if a president cannot be investigated without it being counted as treason then, like a king, he is above the law.The best rebuke to Mr Trump’s solipsism would be Republican defeat at the ballot box, starting with November’s mid-term elections. That may yet come to pass. But Mr Trump’s Republican base, stirred up by his loyal media, shows no sign of going soft. Polls suggest that its members overwhelmingly believe the president over Mr Comey. For them, criticism from the establishment is proof he must be doing something right.

Look up, look forwards and look in

But responsibility also falls to Republicans who know that Mr Trump is bad for America and the world. They feel pinned down, because they cannot win elections without Mr Trump’s base but, equally, they cannot begin to attempt to prise Mr Trump and his base apart without being branded traitors.Such Republicans need to reflect on how speaking up will bear on their legacy. Mindful of their party’s future, they should remember that America’s growing racial diversity means that nativism will eventually lead to the electoral wilderness. And, for the sake of their country, they need to bring in a bill to protect Mr Mueller’s investigation from sabotage. If loyalty to Mr Trump grants him impunity, who knows where he will venture? Speaking to the Constitutional Convention in 1787 George Mason put it best: “Shall that man be above [justice], who can commit the most extensive injustice?”

Xi Jinping has made opening up, reform and economic liberalisation the guiding slogans for his second term. While the ebb and flow of China-US trade tension grabs the headlines, these ostensibly ambitious plans for domestic reforms are of far greater significance to China and the world economy. After locking in his political dominance at the party congress in March, the Chinese president has taken steps to secure the country’s economic future. He has assembled a dream team of competent and reform-minded officials responsible for monetary, exchange rate and financial sector policies. The real test now is whether he uses his vast political capital to support deep-rooted reforms in these and other areas. Mr Xi seems to understand the importance of fixing China’s financial system. Tackling head-on the enormous burden of bad loans in the banking system is essential to avert a disaster down the road. Without changes to their incentives, state-owned banks will continue lending to state enterprises, many of them bloated and unprofitable. This will exacerbate excess capacity in some industries, leaving China no choice but to export its excess supply, fuelling trade tension and putting its own long-term growth in jeopardy. More investment in heavy industry will worsen environmental degradation — a source of concern not just to China but to the world at large. China needs a financial system that better allocates resources to more productive uses and to dynamic parts of the economy, especially the services sector and small and medium enterprises. This requires fixing the banking system, improving depth and liquidity in bond markets, and tightening regulation to mitigate risks. Such reforms will reduce unproductive investment, improve employment and promote more regionally balanced development. Higher employment and income growth, especially in the less-developed interior provinces, would boost household consumption. This in turn would increase imports, making not just President Donald Trump, but all of China’s trading partners happier.This is all easier said than done, but Mr Xi seems to understand the urgency and has the right team in place.Yi Gang, new governor of the People’s Bank of China, has the knowledge and technical skills to modernise China’s monetary policy framework. Guo Shuqing, head of the newly merged banking and insurance regulator, is tough-as-nails. In tandem with Liu Shiyu, head of the securities regulator, Mr Guo will bring more discipline to key parts of the financial system. Liu He, the new vice-premier in charge of economic and financial affairs, is a respected reformer and a confidant of Mr Xi. Wang Qishan, another reform-minded official brought back as vice-president, has drawn the short straw, charged with smoothing over trade and other tension with the US. These men have a shared understanding of the need for developing, liberalising and regulating financial markets. So far, so good. However, Mr Xi’s commitment to reforming financial markets is not matched by a similar focus on the reform of state-owned enterprises and upgrading the institutional framework needed to underpin a market economy. Major state enterprises face stricter budget constraints, but party control over them has also been tightened. With his political power unchallenged, Mr Xi has the opportunity to push aside the reactionary forces that oppose reforms. These typically include powerful provincial governments, large state-owned enterprises, and the major state-owned banks. The president now has enough power that none of these can stand in his way. So he will soon reveal his true self: is he a genuine reformer or does he only tolerate those reforms he regards as essential to economic and social stability? Mr Xi’s team knows what needs to be done, but will be far less effective if he views modest fixes to the financial system as sufficient. He needs to be as bold and ruthless on broad economic reform as he has been in consolidating his political power. The writer is a professor at Cornell University and senior fellow at Brookings

- The Pavlovian mentality has officially been undermined in 2018 according to one model of a "buy-the-dip" strategy.- The implications of this are profound, but most immediately it suggests a return to the low volatility regime that made 2017 one of the calmest years on record is unlikely.- Here is a comprehensive look back at how "buy-the-dip" went from a derisive meme to viable strategy.- And here is how and why it failed this year, visualized and quantified.

One of my favorite subjects to write about when it comes to markets is how "buy the dip" went from a derisive meme aimed at maligning purportedly uninformed retail investors for their propensity to view any decline in equity prices as an "opportunity", to a viable strategy underwritten somewhat explicitly by monetary authorities.

Whenever I have this discussion with people either online or, on the increasingly rare occasions when I find myself in contact with actual human beings operating in what used to be humanity's natural habitat (i.e., in the real world as opposed to in the digital void), I always have to preface it by saying that I do not subscribe to wild conspiracy theories about central banks and stocks. I am certain this plea will be summarily ignored by at least some readers, but I implore you to spare me your theories about Fed officials trading futures from their basements or Kuroda moonlighting as an FX trader and buying any dips in USD/JPY when markets are in turmoil.

There are of course times when some manner of intervention is necessary/desirable and yes, overt intervention in markets by authorities is obviously a real thing. But the whole "plunge protection team" narrative has taken on an absurd life of its own over the past decade or so, and I think it's important that people retain some perspective. Yes, markets are sometimes manipulated both by authorities and by bad actors who are not authorities. Sometimes, instances of the latter can indeed be called "conspiracies." But every seemingly inexplicable tick or errant print isn't evidence of "manipulation" or a "conspiracy."

Sometimes, things just happen - that's what a "fat finger" is and you should get used to that, because thanks to modern market structure, dominated as it is by algos, it's going to happen more and more often. Innovations in market structure have also raised questions about liquidity provision, and if critics are correct to say that liquidity will be increasingly prone to evaporating when we need it most, seemingly anomalous events (read: flash crashes and flash "smashes", as it were) are almost certain to occur with increasing rapidity. Those are just the facts of life in modern markets, and while it's always possible to couch everything in conspiratorial terms (the HFT lobby is, in some ways, its own conspiracy), I think it's critical that people keep some perspective.

Allow me one quick caveat to those points. In China, there is a literal plunge protection team. It's called "the national team" and it does indeed step in to support markets at key junctures in order to, among other things, keep stocks stable around important political events. That's not a secret, nor is it a conspiracy. Everyone knows it and there's no real effort on the part of Beijing to hide it.

So having said all of that, there has of course been an ongoing, coordinated effort by developed market central banks to inflate the prices of risk assets since the crisis. As I never tire of reminding you, that is the furthest thing from a conspiracy imaginable. It's how QE works and for anyone who was unfamiliar with the mechanics, it was explained very explicitly in a 2010 Op-Ed in the Washington Post by Ben Bernanke called "What The Fed Did And Why." That Op-Ed contains this passage:

This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.

If central banks driving stock prices higher and deliberately suppressing corporate borrowing costs is a "conspiracy theory", well then Ben Bernanke is a "conspiracy theorist". And if, to take the other side of the argument, this was supposed to be some kind of a closely-held secret that only central bankers knew about, well then Ben Bernanke is the worst co-conspirator in the world. I don't know about you, but I don't want to be in a "conspiracy" with a guy who writes an Op-Ed for the Washington Post called "What We Did And Why."

The point is, "yes" there has been an ongoing effort on the part of central banks to inflate stock prices (SPY) and catalyze a global hunt for yield that ends up driving everyone down the quality ladder with the effect of leaving everything priced to perfection in fixed income. But "no", that is not a conspiracy. Again, it's literally how accommodative policy works.

Ok, so what was implicit in Bernanke's Op-Ed and in pretty much anything else you want to read on this subject is that at a certain point, this whole endeavor runs on autopilot. The whole idea here is to create a self-sustaining recovery and foster self-feeding loops. You don't want to have to cut rates and/or buy assets in perpetuity, because eventually, you'll end up like the BoJ - cornering entire markets and finding yourself at risk of owning the entire free float of publicly traded companies. Or you'll end up like the ECB - creating a situation where € junk bonds trade inside of U.S. Treasurys (TLT).

Part of the problem - and I've been over this a thousand times if I've been over it once - is that central banks overestimated the efficiency of the transmission mechanism between asset price inflation and the real economy and underestimated the efficiency of the transmission mechanism between accommodative policies and financial assets. In other words, they assumed the "trickle down" from asset price inflation would work faster than it did and they seemed to have thought the market's propensity to frontrun $20 trillion in liquidity would be less enthusiastic than it turned out to be, a rather odd assumption to make given that rational people are always going to frontrun a perpetual bid from a determined, price insensitive buyer. Especially one that's armed with a printing press.

Again, the frontrunning of accommodation is to a certain extent desirable as it represents the autopilot effect which is the point of this whole post. The problem is that if asset price inflation takes too long to trickle down (i.e., takes too long to translate into the type of real-economy outcomes central banks are ostensibly chasing), then the risk is that bubbles inflate as the effects of accommodation become disproportionately concentrated in asset prices. The ultimate irony inherent in that setup is that a bursting of those bubbles could end up being the source of the next downturn and if that downturn shows up before central banks have had a chance to replenish their countercyclical ammo, well then it's not clear how they will respond.

In the U.S. experience, the Fed has "succeeded" (and I use the scare quotes there because there are dangers inherent in this success) in creating a reflexive relationship with markets via a two-way communication loop that effectively gives markets a say in the future course of normalization. This is the relationship described by Deutsche Bank's Aleksandar Kocic in a seminal 2015 note on the "removal of the fourth wall." Here are the key quotes from that note (referencing the September 2015 Fed meeting, which came amid the chaotic fallout from the devaluation of the yuan a month prior):

Going into the FOMC meeting, we had to face multiple nested contingencies, from Fed reaction function, to ambiguous signals given by the economic models which largely underwent structural breaks post-2008 and eroded market's already low confidence regarding economic forecasts. The Fed decision showed that when everything fails, common sense remains the best guide. And common sense prevailed.

This changes everything. Power relations have been revealed; nothing will ever be the same. In that sense, despite seeming status quo, the FOMC was a true Event in the sense of being an encounter which retroactively creates its own causes.

What we now have is another data point which outlines the contours of the Fed reaction function. Fed's communication strategy, it is becoming clear, is an equivalent of what in theater context is referred to as Removing the fourth wall whereby the actors address the audience to disrupt the stage illusion - they can no longer have the illusion of being unseen. An unalterable spectator becomes an alterable observer who is able to alter. The eyes are no longer on the finish, but on the course - what audience is watching is not necessarily an inevitable self-contained narrative. The market is now observing itself from another angle as an observer of the observer of the observers.

That framework has proven to be exceptionally instructive in thinking about the market's reaction to the Fed hiking cycle and it helps to explain how financial conditions managed to get looser as the Fed tightened:

Without getting too much further down the rabbit hole here (too late!), the point is that after a certain amount of time, the reflexive nature of the relationship between the Fed and markets created a series of self-feeding dynamics that optimized around themselves, culminating in a volatility seller's paradise and transforming "buy-the-dip" from a derisive meme applied to retail investors into what became not just a viable strategy, but in fact a nearly infallible law.

The increasing rapidity with which intermittent volatility flareups collapse has been a defining feature of markets over the past couple of years and this dynamic has become especially prevalent since Brexit.

Part and parcel of that dynamic is the idea that the central bank put has become self-sustaining – it runs on autopilot. Why wait on dovish forward guidance (or any other signal from the monetary gods) to buy the dip when you know with absolute certainty that in the unlikely event a drawdown proves to be some semblance of sustainable, policymakers will calm markets? If you know it’s coming, well then you should buy the dip now. This becomes a recursive exercise as everyone tries to frontrun everyone else and before you know it, dips and volatility spikes are mean reverting at a record pace as the prevailing dynamic optimizes around itself.

In short, the two-way communication loop between policymakers and markets became a self-fulfilling prophecy over the past couple of years. Markets became so conditioned to policymaker intervention and dovish forward guidance at the first sign of trouble that no one saw any utility in waiting around for it anymore.

And here's how BofAML puts it in a note dated April 10:

A key factor that created 100yr+ records in terms of low equity volatility last year was the moral hazard injected by central banks teaching investors that buying equity-dips (or selling equity volatility spikes) was "free-money". This led to complacency among investors that risk was not real, resulting as we argued in our 2018 outlook, in an unsustainable "low volatility bubble".

Well, you might have noticed that things aren't "mean reverting" as quickly as they used to.

That is, while markets recovered from the February correction, things got tumultuous again, as trade war bombast collided with domestic political turmoil and Syria concerns to destabilize markets anew. So far, the "Powell put" is missing in action and probably will remain so up to and until equities decline enough to squeeze financial conditions materially, forcing the market to take some hikes out of the curve, thus restriking the Fed putfor Powell.

Ok, well in the meantime, BofAML is out suggesting that "buy-the-dip is failing." In the same note mentioned above, the bank is out reassessing a trading strategy based on all of the dynamics described above. Here's how it worked:

In 2017, we showed how a simple trading strategy of holding cash and buying any 5% dip in S&P futures until either the market retraced or 20 trading days passed outperformed the S&P on a risk-adjusted basis consistently since 2014. This was in contrast to 2011-2013 when this simple strategy failed to outperform, and demonstrated a change in market dynamics towards faster shock recoveries and shallower dips.

See what I mean when I said, above, that "buy-the-dip" has literally been transformed from a derisive market meme applied to retail investors to a viable, indeed seemingly infallible, strategy?

Over there on the right-hand side, you can see that "buy-the-dip" (as defined above) has seemingly stopped working. Do you want more details? Ok, that's fine. BofAML has them for you along with some more fun visuals. To wit:

The 5-Feb-2018 trigger seems most similar to the 21-Aug-2015 shock (China slowdown scare), which lost 1.93% upon liquidation at the end of the 20 trading day window and ultimately took 52 days to fully recover (Chart 8 and Chart 9). Looking at the recent 5-Feb shock, we are 43 days in and the market is down an additional 1.63%. However, in comparison, after 43 days into the Aug-15 shock the S&P had actually recovered about 2%. While in ‘15 Chair Yellen supported markets by announcing a delay of rate hikes due to concerns about China and equity weakness, today few expect Chair Powell to step in to support stocks. Our trading rule triggered for a second time in 2018 on 22-Mar, and as of 6-Apr we are 13 days into the 20 day investment window. At current prices, the trade has lost 2.13%. In order for the dip to fully recover within the window, S&P E-mini futures (ES1) would need to cross 2,802.50 by 19-Apr, over 7% above 6-Apr’s closing level of 2,605.75.

Note the bit about Yellen in there. That "support for markets" in 2015 that BofAML mentions is what Kocic was referencing in the 2015 noted cited above.

So, according to BofAML's model of one "buy-the-dip" strategy, the spell appears to be broken and one thing that should be readily apparent from everything said above is that once the market starts to believe the game is up, the psychology that underpins the self-feeding nature of this dynamic goes into reverse. Here is BofAML one more time, explaining what I just said in the context of a potential return to the low volatility regime:

Importantly, even if US equities do end up recovering to set new highs in 2018, perhaps on the back of a strong earnings season, simply breaking the trend of rapid recoveries (and the Pavlov BTD mentality), should prevent a return to the 2017 bubble lows in volatility.

There you go. So while all of this needn't necessarily mean that U.S. equities can't make new highs, what it does mean is that betting on rapid "mean reversion" on any volatility spike isn't likely to work out as well as it did in the past. Indeed, a return to the conditions that made last year one of the calmest on record by all manner of measures simply isn't likely.

‘What consumers and tech companies have essentially been doing is bartering services for personal data’

Gillian Tett

Seven years ago, after the financial crisis, anthropologist David Graeber published a provocative book. Debt: The First 5,000 Years challenged how economists think about debt, credit and barter.Graeber argued that economists tended to assume financial history had moved in a neat evolutionary line: first, so-called primitive people engaged in barter (swapping food for cloth, say); then they adopted money (think ancient gold coins); last, they embraced debt (aka modern banks, mortgages and credit cards). While this picture seems appealingly easy to understand, Graeber insisted that it was completely wrong. He pointed out that simple, ancient societies had complex systems of credit and barter that did not vanish when money appeared. To put it another way, history does not always move in one direction — barter, credit and money can, and do, coexist.It is an idea we urgently need to rediscover, but this time in relation to Big Tech. In recent weeks, there has been an uproar about the revelations that large tech companies such as Facebook and Google have been harvesting consumer data for commercial ends.At first glance, this looks exploitative. But in exchange for giving up their data, consumers have received something — digital services such as messaging systems, maps, information and apps. Indignant techies love to point out that consumers have been given these services “for free”, since there is often no monetary payment involved; meanwhile, politicians (and consumer groups) complain that tech companies have taken consumer data “for free” too.Perhaps a better way to frame these transactions is to revive that ancient term “barter”. Silicon Valley chief executives often describe themselves as visionary pioneers, creating innovative models for doing business, but what consumers and tech companies have essentially been doing is bartering services for personal data — in the same way that hunter-gatherers might have bartered berries for meat. We might have thought that the 20th-century economy was built on money, but the early 21st-century cyber economy is partly based on barter too.Does this matter? An anthropologist might say no. But most policy makers, business leaders and consumers would beg to differ. For one thing, the exact nature of what was being bartered here — the sheer volume of data being hoovered up by tech companies and their reach into our most personal messages, preferences and political views — was arguably not known by consumers. Few of us have the time or legal expertise to fully read or comprehend the lengthy terms and conditions that flash up before we can access digital services.It it also fair to say that our leaders, laws and economic models are not set up to cope with a world where barter is much more than a historical curiosity. Economists, for example, do not have any real way to include barter in their view of the economy, since they tend to measure everything according to price. “Free” items, such as apps or data exchanges, are largely ignored in the data on gross domestic product. Lawyers do not know how to cope with barter when it comes to discussing issues of antitrust or the abuse of monopoly power, since the US concept of antitrust and collusion presumes that the way to measure consumer exploitation is to see whether they have been charged excess prices — as measured with money.---------------Meanwhile, consumers have not been offered an alternative to the barter trades that drive the digital economy — or the chance to consider how they might structure them differently. Is it “unfair” if Facebook (or anyone else) grabs all your data in perpetuity in exchange for letting you have free social media? Does this barter actually represent good value? And is there a way to have gradations on this exchange — and enable consumers to drive a better bargain?Thankfully, a debate about this is — belatedly — starting. Policy makers in Europe are limiting the data that tech companies can take. Meanwhile, some tech entrepreneurs and data scientists are trying to introduce more clarity — and money — into these barters by campaigning for consumers to be given proper ownership of their “digital assets” (ie data), so that they can “sell” these in clear-cut transactions.In many ways, this sounds sensible — and if we did ever turn this barter into a sale, it would mark another swing of history. But there are some big impediments: will consumers pay money for cyber services? Can blockchain, an electronic database for transactions, really act as a ledger for data? Would governments ever introduce the legislation needed to make this work?For now we are left in limbo: our laws and models assume we have a money-based world; but our mobile phones and laptops operate with barter trades we barely understand. If nothing else, this shows that it is time to take a broader and, dare I say it, anthropological vision of the economy. Money alone does not always make the world go round, least of all in the tech world.

In 1971, the US went off the gold standard, which meant that it no longer had the responsibility to redeem its bank notes for real money—i.e., precious metals. It also meant that, as long as it could get people to accept the essentially worthless bank notes as currency, they could print as much as they liked. They took full advantage of this fact and transformed the US from the world’s greatest creditor nation into the world’s greatest debtor nation in under forty years.The rest of the world followed this extraordinarily bad example and, as a result, no nation is now on a gold standard and all nations are in debt, many of them beyond redemption.Today, the chickens are about to come home to roost in the form of a worldwide economic crisis. Some countries—particularly in Asia—are preparing for the debacle by loading up on gold, so that when the collapse comes they’ll be able to float gold-backed currencies that will allow trade to continue.Interestingly though, some countries are pursuing this wise move on a non-national level. The US in particular has, in recent years, seen several of its states pass laws allowing precious metals to once again be used as currency.The most interesting of these developments took place in Wyoming recently, where the Wyoming Legal Tender Act (WLTA) has removed all forms of state taxation on gold and silver coins and bullion, and reinstates precious metals as currency.The act stipulates that transactions made in gold and silver, “shall not give rise to any tax liability of any kind.” And yes, this is intended to include income tax, property tax, capital gains, and sales tax.Wyoming is not the first state to reinstate the use of precious metals as currency. Arizona and Utah have also declared precious metals free of income tax, and more than thirty-five states have declared gold and silver free from sales tax. (Precious metals are free from any form of taxation in only four states—Wyoming, Oregon, Texas, and South Dakota.)But, will the citizens of these states actually choose to transact purchases in gold and silver, when paper money is so handy?Well, they should, and for the best of reasons—they’ll have to hand over less of their money to state governments. If, for example, someone were to pay for a new car in gold, he would not have to pay the state an additional 4%. (Some municipalities charge 6%.) This is quite an incentive.But that, of course, would not put precious metals into every pocket in Wyoming. What would achieve that would be smaller purchases, such as a bag of groceries, or a tankful of fuel for the car. Paying with coins would most certainly be more of a nuisance than paying with bank notes, but the prospect of trimming 4–6% off every bill would mean that paying in gold and silver might well become the norm for those who value frugality.So, what has been the motivation for bringing back the “barbarous relic?”In House hearings for the bill, the Sound Money Defense League’s Jp Cortez stated:With the abuses of the Federal Reserve’s paper money system becoming increasingly obvious, we’re seeing more legislators across America advance sound money legislation.Stefan Gleason, president of Money Metals Exchange, stated in support of the bill:In reality, Federal Reserve Notes are “fake money” because they have counterparty risk. Restoring gold and silver as money will solve many of the problems we are seeing with inflation and runaway debt.More pointedly, when Arizona was dealing with its own bill on taxation of precious metals, then Representative Ron Paul said, “We ought not to tax money… It makes no sense to tax money… Paper is not money, it’s fraud.”Clearly, legislators in each state that’s created similar legislation recognize that the Federal government is nearing the crisis stage and are hoping that they can avoid going down with the ship. By having precious metals in place before a collapse, they potentially provide their states with an insurance policy that will allow them to continue to make transactions at all levels, regardless of the machinations of Washington and the central banks.In discussing the Wyoming Act with a colleague who’s a noted writer and advisor on precious metals, his first reaction to me was, “What do they mean by coinage? If they mean coins that have a face value stated on them, and that face value must be recognized as the value of the coins, there’s no chance that this will solve the problem.”An excellent point. But closer inspection of the act confirms that specie is defined as “having gold or silver content, or refined bullion, coined, stamped or imprinted with its weight and purity.” A stated denomination is not relevant, nor is it a requirement.That being the case, a Canadian maple leaf would be as acceptable as an American eagle. And a Mexican libertad, which has no denomination on its face, only a weight, would be just as acceptable for use in transactions.Under the US Constitution, “No state shall… make any Thing but gold and silver Coin a Tender in Payment of Debts.” Therefore, it would be difficult for the Federal Government to make a case that states should be forced to repeal any law allowing gold and silver as currency, and this may well be why the central government has not yet created significant pushback against the trend toward states’ rights to use precious metals.They cannot, however, be pleased at this development, at a time when they themselves are supporting the central banks’ initiative to do away with physical currency of any kind—to enslave the American people to bank-generated electronic transactions for virtually all purposes.If all those states where gold and silver has been reinstated as money were to begin using precious metals on a regular basis, as they are indeed incentivized to do through these laws, it would effectively end the federal monopoly on money… and quite possibly derail the central banks’ effort to do away with cash.So, why then, has a movement not begun in the over thirty-five states where some form of legislation has been passed to reinstate the use of silver and gold as money?It may be that the average guy on the street doesn’t really understand how precious such legislation is to him. Possibly, even though the average American no longer trusts his central government, nor the banks, he is too complacent to act on his own predicament.If this is the case, we can certainly expect that when the debt crisis hits him full-force, he will belatedly say, “Somebody do something,” as he finds that he’s unable to function normally when buying groceries or filling up the tank in his car. If the individual states do not, by that time, have real money in place and in common use, the average American will find himself in a similar situation as the average Greek today—at the mercy of his bankers as to how much of his money he actually has access to.

If you know the other and know yourself, you need not fear the result of a hundred battles.

Sun Tzu

We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.